Emissions Due Diligence

Motivation

Goal7's client, a Private Equity firm was evaluating an investment opportunity in a package of E&P assets marketed for sale in the UK. Goal7 performed an emissions and carbon reduction-based Red Flag Diligence review of the portfolio, including assessing re-purposing for new energy and low carbon solutions.

Our Approach

Goal7 performed a due diligence review of the assets, using access to the vendor's data room information, publicly available information on the assets and their emissions, our in-house knowledge of the assets and relevant industry experience. We were involved in Q&A with the target management team and worked closely with the client's other advisors.

Goal7's review included the following elements:

• Assessment of emissions (absolute and intensity), including baseline, forecast for business as usual case and under specific investment scenarios
• Benchmarking of asset emissions and asset performance versus relevant Independent operators and best-in-class performing assets in similar regions
• Assessment of compliance with existing regulations and evaluation of future legislative changes that may harm the portfolio
• Physical and transition climate analysis, including risk rating, mitigations and high-level cost estimates
• Analysis of emission reduction commitments, Energy Transition Projects and Carbon Capture projects, their potential effectiveness, and assess any gaps in asset plans versus regulatory requirements, including NSTD targets
• Identification of new carbon emission reduction initiatives, including high-level costs and timing for implementation

Benefit and Impact: Goal7's rapid and efficient assessment allowed the client to understand the potential risks, including the costs of implementing carbon reduction plans and opportunities in a short time frame with limited seller-provided data. The client factored in our findings into its assessment and pricing of the opportunity.

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